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NAFTA-euphoria, or more correctly now USMCA-euphoria swept across the corn and bean markets yesterday and sent bear traders scampering for the exits. When you consider that Canada at $20.5 billion and Mexico $18.6 billion were our first and third largest ag export markets last year, reaching a new trade agreement should be cause for celebration. That said, it really does not shift the currently projected balance sheets, nor despite some wishing thinking, does it seem to have moved us one iota closer to kickstarting negotiations with the number two ag export market, China. When you consider that nearly 60% of the $19.6 billion we sold to China in 2017 was soybeans, it is difficult to think they will maintain the same position in the rankings. Regardless, the enthusiasm yesterday lifted corn and bean prices back to pre-grain stocks report levels, but overnight harvest and crop size reality set back in.
There were no surprises in the weekly crop updates, but it did remind the trade that this harvest is moving ahead nicely. Corn harvested moved up 10% to 26% complete, which compares with an average pace of 17%. Bean harvest moved ahead by 9% to 23% complete which is 3% ahead of the average pace. While being ahead of schedule does not assure large yield, the fact that the corn crop is still rated 69% good/excellent and beans 68% in the same category would make one lean towards that assumption. FC Stone did publish their estimates for the October report this morning and pushed corn yields up to 182.7 and beans to 54, compared with the USDA last month at 181.3 and 52.8. The report will be issued next week on the 11th.
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